Unclaimed Tax Refunds, $1.2 Trillion Government Funding Bill, and the Apple Lawsuit
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Tax Policy/News:
March 25: The IRS has 940,000 unclaimed tax refunds from 2020 that are about to expire. Is one of them yours?
The IRS is alerting taxpayers to the possibility of over $1 billion in unclaimed refunds for tax year 2020, with roughly 940,000 individuals having until May 17 to submit their tax returns.
IRS Commissioner Danny Werfel emphasized the urgency for taxpayers to claim these refunds before the deadline, with an average median refund of $932. Texas, California, Florida, and New York have the highest numbers of potentially eligible individuals.
Taxpayers who need to file a return are advised to obtain necessary documents from their employers or banks and utilize online tools available on IRS.gov.
Failure to claim refunds within three years results in the funds becoming property of the U.S. Treasury, but due to the pandemic, the deadline for 2020 unfiled returns was extended to May 17.
However, refunds for 2020 may be withheld until taxpayers file for subsequent years. Werfel urged individuals to review their records promptly to avoid missing the deadline, emphasizing that tax season commenced on January 29, with over 71.5 million individual tax filings submitted to the IRS thus far.
The Internal Revenue Service (IRS) has announced that its compliance efforts regarding erroneous Employee Retention Credit (ERC) claims have exceeded $1 billion since last fall, particularly focusing on addressing aggressive marketing tactics leading to questionable claims, with a specific emphasis on claims made for 2021.
IRS Commissioner Danny Werfel expressed concern over the widespread abuse harming small businesses, noting significant progress in protecting revenue through initiatives such as the ERC Voluntary Disclosure Program (VDP), claim withdrawals, and identification of improper claims.
Despite these efforts, the IRS continues to monitor and address ERC-related issues, including discussions in Congress about extending the statute of limitations for ERC claims.
Various programs remain in effect, such as the VDP and claim withdrawal process, while audits, investigations, and a processing moratorium on new claims continue, aimed at protecting businesses from misleading information and ensuring compliance with ERC eligibility rules.
Economic News/Policy:
Mach 22: Biden signs the $1.2 trillion government funding bill
President Joe Biden signed legislation funding the government through September, marking the completion of a tumultuous funding process amidst a divided government.
The $1.2 trillion government funding bill, passed by the Senate in a 74-24 vote after negotiations breached the midnight deadline to avoid a shutdown, had earlier received approval from the House with a vote of 268-134.
Despite brief disruptions, the government will now be funded through September, with a total spending level of $1.659 trillion for the fiscal year.
The bill covers various departments and marks the culmination of a year-long process featuring stopgap bills, intense partisan clashes, and last-minute negotiations.
Despite challenges, bipartisan agreement ultimately prevailed, ensuring government operations and averting a shutdown.
March 20: Key takeaways from the Fed’s rate decision and Powell’s press conference
The Federal Reserve maintained its key interest rate steady for the fifth consecutive meeting, citing the need for more data before considering rate cuts.
While aggressive rate hikes were implemented over the past two years to combat high inflation, Fed Chair Jerome Powell emphasized the central bank's reluctance to lower borrowing costs yet.
Despite expectations of a summer rate cut, Fed officials are cautious about the timing, balancing the risks of cutting too soon or too late. The latest economic projections suggest fewer rate cuts in the coming years than previously estimated, with economic growth expected to be higher this year.
Powell highlighted persistent inflationary pressures, particularly in housing and the services sector, but stressed the need for more data to determine if inflation has stalled.
The Fed remains in a wait-and-see mode, prioritizing confidence in inflation's trajectory towards the 2% target. Despite uncertainties, the economy continues to show strength, with solid economic growth, a robust job market, and healthy consumer spending, though moderation in spending has been observed recently.
Technology:
March 21: The UN adopts a resolution backing efforts to ensure artificial intelligence is safe
The United Nations General Assembly unanimously approved the first UN resolution on artificial intelligence (AI), supported by 123 countries including China and sponsored by the United States.
This historic resolution aims to ensure that AI benefits all nations while upholding human rights and ensuring safety, security, and trustworthiness.
Vice President Kamala Harris and National Security Advisor Jake Sullivan lauded the resolution for setting out principles for AI usage in a safe manner, emphasizing its importance in protecting individuals from harm and ensuring widespread benefits.
The resolution aims to close the digital divide between developed and developing countries, making sure all nations are involved in AI discussions and have access to its benefits.
While not legally binding, the resolution reflects global opinion and encourages the development of regulatory frameworks to ensure safe AI systems, promoting progress towards achieving the UN's development goals for 2030 while respecting human rights and fundamental freedoms throughout the AI life cycle.
March 21: Energy Department study finds financial benefits from linking offshore wind power projects
The Energy Department has shared findings suggesting that linking offshore wind power projects via offshore transmission networks could reduce electricity costs, decrease reliance on fossil fuels, and enhance overall grid reliability.
The study, part of the Biden administration's goal to deploy 30 gigawatts of offshore wind development by the decade's end, indicates that the financial benefits of this approach may outweigh costs by a ratio of up to 2-to-1.
However, a grid strength analysis revealed potential drawbacks, with 14 out of 24 points of interconnection showing weak grid-strength conditions, suggesting the need for further studies and possible additional investment.
Energy Secretary Jennifer Granholm highlighted the importance of offshore wind energy in enhancing grid reliability and reducing fossil fuel dependency, emphasizing the administration's commitment to advancing offshore wind development.
The study coincides with recent milestones in offshore wind projects, including the launch of New York's first offshore wind farm and the approval of a significant offshore wind project off the coast of Virginia.
Energy and Environmental Policy/News:
March 22: IRS expands energy credit guidelines
The Internal Revenue Service (IRS) has broadened rules for federal production and investment tax credits under the Inflation Reduction Act, as outlined in guidance released in Notice 2024-30.
The expanded rules include provisions for determining an "energy community" and the eligibility of certain land-based equipment for offshore wind facilities to receive production and investment tax credits.
The Inflation Reduction Act allows for increased credit amounts or rates for clean energy projects meeting specific requirements, offering bonuses of up to 10 percentage points on the investment tax credit and a 10% increase for the production tax credit.
The guidance identifies criteria for defining an "energy community," encompassing various geographic areas with historical ties to fossil fuel industries or brownfield sites.
Additionally, the guidance permits offshore wind facilities to attribute their nameplate capacity to additional property, such as supervisory control and data acquisition system equipment in eligible ports, and specifies qualifying land-based power-conditioning equipment. The IRS's expansion of FAQs further clarifies these regulations.
March 20: EPA issues new auto rules aimed at cutting carbon emissions, boosting electric vehicles and hybrids
The Biden administration announced new automobile emissions standards aimed at significantly reducing planet-warming emissions from passenger vehicles, with the EPA unveiling rules that relax initial tailpipe limits but ultimately approach strict standards set out by the agency.
The regulations come amidst a slowdown in electric vehicle (EV) sales, which are crucial for meeting these standards.
The final rule allows the industry to meet the limits if 56% of new vehicle sales are electric by 2032, along with other partially electric cars and more efficient gasoline-powered cars.
Despite industry objections, the standards are projected to avoid over 7 billion tons of carbon emissions over three decades, with significant benefits such as reduced health care costs and fuel expenses.
While praised by environmental groups, concerns linger regarding loopholes and industry compliance.
Republicans criticized the standards as an unrealistic push towards EVs, while the auto industry welcomed the adjusted targets, allowing more time for EV infrastructure development and consumer adoption.
ICYMI:
March 21: Justice Department sues Apple, alleging it illegally monopolized the smartphone market
The Justice Department has filed a far-reaching antitrust lawsuit against Apple, alleging that the tech giant has established an illegal monopoly in smartphones, stifling competition, innovation, and keeping prices artificially high.
The lawsuit, supported by 16 state attorneys general, accuses Apple of leveraging its control over the iPhone to engage in anticompetitive behavior, such as limiting access to contactless payment for third-party digital wallets and refusing to allow encrypted messaging with competing platforms.
While Apple defends its practices as essential for user privacy and innovation, critics argue that its high margins and tight control over the app store harm consumers and hinder competition.
The lawsuit marks another significant step in the Biden administration's aggressive antitrust enforcement efforts against big tech companies, following similar actions against Google, Amazon, and Meta Platforms.
For Fun:
March 21: US surgeons transplant a gene-edited pig kidney into a patient for the first time
Doctors in Boston have successfully transplanted a genetically modified pig kidney into a 62-year-old patient, marking a significant advancement in the pursuit of using animal organs in humans.
Richard “Rick” Slayman, the recipient, is recovering well and is expected to be discharged soon.
The transplant, which took four hours, is believed to provide Slayman with functioning kidneys for at least two years.
This groundbreaking experiment represents the latest progress in xenotransplantation, with pigs genetically modified to increase compatibility with humans.
While promising, further studies involving more patients at different medical centers are deemed necessary for wider availability.
The procedure was granted special permission by the FDA under "compassionate use" rules, offering hope to thousands on the national transplant waiting list.